Industry
pro gets sucked into hype vortex.
Friday, I got a call from a long-time
business broker and lower mid-market deal maker.
This guy has sold a couple of dozen
businesses -AND- taken equity stakes in poor performers that needed his help to
get ready for sale.
He was calling to talk about a new project
and is thinking about leaving business brokerage behind forever.
He wanted my opinion… AND he had a story to
tell me.
Now, I’m gonna tell it to you…
This man, Let’s call him Nate, is an experienced
deal maker.
He knows what banks want in making loans
because he and his clients have done the dance.
He knows what sellers want as he’s had to
make them happy.
He knows what a business balance sheet
needs to look like after closing in order to avoid the risks of over-leverage
because he’s had to bring buyers there in a responsible way.
And then, one day while using the internet,
Nate saw a slick video from a guy who promised that he’d done dozens of deals
all around the world using none of his own money.
He got sucked into a hype vortex.
He bought a ticket to attend a three-day
seminar in Florida where he was going to learn all of these secrets.
It cost him over $10,000 precious Canadian
Dollars to attend.
‘Half
way through the first day I began to realize how stupid I had been,’ confessed Nate, ‘every
example that was given to us was actually not possible in my direct
experience.’
‘On
the off-chance that something was a doable example, the odds to finding a
seller willing to accept the terms were a million to one.’
Here’s where the real tragedy lies,
however….
‘David,
you should have seen the people there. It was obvious that most could not
afford to be there and saw this seminar as their ticket to a better life. They had no idea they’d been taken advantage
of.’
Nate finished by telling me that there were
some joint venture contracts that were part of the package that he thought he’d
be able to recycle and salvage so his experience wouldn’t be a complete loss.
I’ve said this many times before and I’ll
repeat it here-
To buy a business you either need to
have some money or equity of your own or you need to have some partners or
investors willing to put some in. The
odds of a buyer or buyer group with no money being able to buy a successful
business are slim to none.
I’ve made a bunch of videos on this topic
which are gathered in this
playlist.
People who take my business buying course
or join my business buyer group coaching program should have money, or access
to money linked to equity in assets, or are exercising discipline in their
lives which is allowing savings to be accumulated EVERY MONTH.
If you can’t get your act together to
manage a household, how do you expect to be able to manage a business????
Happy Tuesday.
Dave
PS. The financial forecasting program is
now in week #4 and is going strong. Learn more and sign up over here.
No comments:
Post a Comment